Insurance company Swiss Re reports a second quarter net profit of $812 million

Swiss Re reports $812 million Q2 profit

GENEVA — Swiss Reinsurance Co. reported a net profit of $812 million for the second quarter Thursday, thanks to investment gains and despite payouts for two large-scale disasters.

The company recorded a net loss of $342 million during the same period last year.

Earnings per share were 2.56 Swiss francs compared to a loss per share of 1.13 francs in 2009.

Analysts at Zuercher Kantonalbank noted the poor performance of Swiss Re’s core reinsurance business — partly attributable to large payouts for the Chile earthquake and the Gulf of Mexico oil rig explosion. In total Swiss Re paid out $830 million for those two disasters alone.

The combined ratio for Swiss Re’s property and casualty business worsened to 102 percent from 89.4 percent the previous year. A combined ratio below 100 percent indicates profitability in the insurance industry.

The company earned $2.51 billion from property and casualty premiums during the second quarter, a drop of 21 percent year-on-year

The Zurich-based company also disappointed with its life and health insurance premiums, which were down 9 percent to $2.18 billion.

The reason net profits were significantly above market expectations was due to strong returns on investments and lower impairments in asset management, analysts said.

Swiss Re warned that regulatory changes aimed at limiting risky financial investments “impose increasing constraints” on the insurance industry. At the same time, consolidation among insurers could stimulate demand for reinsurance, it said.

Shares in Swiss Re closed 2.9 percent lower at 47.53 Swiss francs ($45.43) on the Zurich exchange.